CBIC May Free Up Importers' IGST Credits

In a bid to facilitate importers who may have underpaid Integrated Goods and Services Tax (IGST) dues, the Central Board of Indirect Taxes and Customs (CBIC) is likely to issue a standard operating procedure (SOP) to enable them to claim input tax credit (ITC) on IGST payments made to rectify shortfalls flagged after Customs clearance.

- MONIKA YADAV

This new protocol for GST field formations could potentially unlock several hundreds of crores worth of input tax credits of importers that are currently stuck, straining their working capital flows, two government officials aware of the development told Business Standard.

Short payments of IGST on imports are usually discovered during internal audits or regulatory checks, and tend to arise due to valuation differences, classification errors, or other discrepancies. To settle the remaining amount of the originally owed IGST, importers have to pay the shortfall through a TR-6 challan, a manual government receipt used for such payments.